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Suppliers say the new third generation mobile network could
revolutionise the communications market. But New Zealands IT
directors seem happy to wait and see.

Given that telecommunications companies (telcos) have a long
history of promoting a technology for technologys sake rather
than its business benefits, things do not bode too well for 3G.

Yet a series of soft launches by operators worldwide
have subtly altered the landscape for those seeking to benefit from
3Gs advanced data capabilities. Indeed, there is considerable
enthusiasm among those who have bitten the bullet and
become early 3G adopters.

During a recent telecommunications conference in New Zealand,
Telecom, Vodafone and their suppliers were touting 3Gs
potential. 3G was hailed as the most exciting thing since, well,
2.5G.

Rival Vodafone promises to launch its faster HDDPA network in
April 2005, with TelstraClear also working on offering its own 3G
network eventually. By now, contractor Lucent Technologies should
have upgraded half of Telecoms 800 cell sites to the 3G
standard EV-DO.

The deciding factors
In New Zealand, coverage and price will be the deciding factors on
whether or how soon local businesses will adopt 3G.

IT executives contacted by MIS are adopting a wait-and-see
approach before committing to the new technology. While some appear
unexcited about 3G, most are looking forward to its potential.

Promised faster download speeds should boost notebook use by
remote workers, with council staff, for example, set to use it for
telemetry and GPS reporting.

Mainfreight, for instance, has been putting off mobility
projects while waiting for 3Gs arrival in New Zealand shores.
IT supervisor Mike Hood says his company is gathering information
on 3G for projects starting in 2005. Mainfreight wants to mobilise
applications such as CRM, vehicle tracking and pick-up and delivery
applications.

"Potentially 3G opens up new doors and allows us to put new
things on the go," says Hood.

Graeme Osborne, president of the Telecom Users Association of
New Zealand, advises organisations to look at what 3G might offer.
But he warns them not to get too hyped up", saying 3G is
simply an increase in download speeds and "wont change the
world"

Osborne currently "loves" the Vodafone connection on his laptop.
It operates like a dial-up, he says, but 3G will be "five times
faster", running like 256kbs broadband.

The Statistics Department information business services manager
adds his organisation has "a watching brief" on 3G technology and
could well adopt it &"once we understand it".

Osborne expects organisations with many mobile workers will
adopt 3G, but adds his department has few of them.

Defence New Zealand is also waiting to "see how it develops"

"There are a range of issues, such a mobility capabilities,
coverage and security. We havent really gone into it beyond
that,"says chief information officer Ron Hooton.

Christchurch City Council is "keeping abreast" of 3Gs
capabilities, but could use the technology for staff "out in the
field". Acting information management and technical services group
manager Deidre Butler says the council will look at 3G sometime in
2005. "But coverage is the issue. Let the technology bed in,"she
adds.

Manawatu District Council also sees staff in remote areas using
3G for telemetry reporting and recording council assets using
3Gs GPS locating ability. But once again, coverage will be
the issue, says IS manager Laurence Bevan.

Ministry of Fisheries operations manager John Hanson believes 3G
could be "really beneficial" for his remote workers in coastal
areas who need access to business applications.

He expects the ministry to consider using 3G technology after
the summer but he too, says, "coverage will be the issue".

Differing viewpointsMarket analysts seem divided about the
potential success of 3G in New Zealand.Auckland-based Chris Loh of
IDC feels business users will be the early adopters of 3G
technology for its mobility, though mobile entertainment will
become big with general consumers.Loh says 3G will also aid the
extension of converged voice and data IP networks currently linking
branch offices. New IP equipment and services are transforming the
IP communications industry, he says, though issues such as
security, reliability and complexity still impede demand.

Service providers will also develop many value-added offerings.
"Telecoms complementary 3G and wireless strategy looks to
position them strongly in terms of best of both world service
offerings modelled around customer behaviour (anytime, anywhere
capability flowing into low-cost high-bandwidth at dwell sites),"
says Loh.

However, Sydney-based Paul Budde accepts 3G is faster than 2G
and promises 30 per cent lower operational costs, but he feels the
technology is over-hyped and wont "make much difference" to
business. "Overwhelmingly, the world is not enthusiastic about
mobile data applications and there have been no major developments
beyond texting," says Budde.

In mature 3G countries, like Korea and Telecom, 3G
operating revenue and profits are now falling, he claims.

In Australia, the Hutchison 3G network started slowly last year
and now claims 500,000 users. This was helped by it capping toll
calls to A$99 a month (now A$79) - a move other telcos
followed.

Budde expects similar capped call-plans to arrive in New
Zealand.

As for a mobile workforce, Budde says only 1 to 2 per cent of
mobile users will be business travellers. "They will be much better
off using wi-fi, wi-max and hotspots at airports and
coffee shops."

The early adopters
Overseas experience shows better fortunes for 3G once hurdles can
be overcome.

Ted Matsumoto, architect of 3G technology for supplier Qualcomm,
says both Vodafone and NTT DoCoMo initially struggled with their 3G
services until they introduced better handsets with longer battery
life and completed nationwide coverage in Japan and Korea.
Consequently, in 2005, 3G phones are expected to make up half of
cell phone sales in Japan.

As a late adopter of 3G, New Zealand will "piggy-back" on these
experiences and the telcos should avoid the hassles that hampered
3Gs growth in Asia, says Matsumoto.

The biggest sales point of 3G in Japan is low-cost data
transfer. NTT DoCoMos 2.5G handsets with megapixel cameras
gave users very high monthly bills, encouraging many to shift to
their 3G "Foma" handsets. For Matsumoto, the "killer app" of 3G is
making its cost reasonable for hundreds of thousands of users, thus
3G faces an issue of marketing, not technology.

Many application developers are hungry for business, says
Matsumoto, who spoke at the recent Wireless Data Forum Convergence
in Auckland. The higher costs of 2G forced the axe on many
projects, which could be made viable and revived under cheaper
3G.

Consequently, as in Asia, he sees business people using 3G for
telephone conferences, messaging, internet mail, information
storage, plus personal uses including shopping, banking and
music.

Brian Barcelo, international business director for Lucent
Technologies, told the Auckland forum Telecom New Zealand should
succeed with 3G. Entertainment spending was a growing part of
peoples wallets so people will want 3Gs higher download
speeds, he says. In addition to entertainment services, people will
want 3Gs impending services covering VOIP and video
broadcast/multicast. EV-DO also boosted wireless use in Korea for
services including music, television, movies, games,
whats hot, adult entertainment, news and traffic
reports.

In the US, 3G technology is being used by government for facial
recognition and biometric applications, retina scanners and
accessing databases of fingerprints. The Emergency Services are
using 3G for remote diagnostics and Washington Police is using the
technology to remotely check licence plates. Such services were
secure, as there are currently "no interruption technologies for
CDMA", he says.

In the UK, 3G has had a slow start, with services starting last
year, but extra networks this year and the launch of new phones and
services this Christmas, should give the technology critical
mass.

Nicolas Wheeler, managing director for multimedia content at UK
television news service ITN, views 3G as the communications media
of the future. ITN supplies content specifically for 3G handsets,
offering features and characteristics that would not be achievable
under previous 2.5G (GPRS) technology.

After Christmas 2004, most 3G phones on the market will be
capable of video, giving "a critical mass of people for services
like ours", Wheeler explains.

"It (dabbling in 3G services) makes sense for us because, as a
major independent content supplier, were able to pay off the
costs of gathering news among a wide variety of contracts," he
adds.

Into the fast lane
Like Telecom NZ, British telcos Vodafone, Orange and T-Mobile are
pushing data cards ahead of handsets.

UK marketing agency Avvio has nine account managers with
3G-enabled notebook PCs. "Our account managers can now walk into a
clients office, open their notebooks and download a 3Mb file
in seconds. We can download proofs, large PDFs and even small,
animated movies. You simply couldnt do that before without a
lot of fuss," says CEO Duncan Gardner.

Gardners main pitch for 3G, therefore, is as a personal
productivity tool, adding that he was once stuck in traffic, but
the time spent in the taxi was not wasted as 3G allowed him to do
50 minutes of work by email.

Technology consultancy Cochango has deployed 10 3G cards for
their mobility, believing a laptop PC enabled with a 3G data card
bridges the gap between pocket mobile devices (PDAs) with their
limited application suites and LAN or wi-fi bound PCs with no
mobility.

Cochango director Richard Poole claims he can parachute a
project team into a clients premises in a couple of
hours.

"In the past it could have taken as long as a week to achieve -
even though its just a question of hooking up a few
wires."

Perhaps more importantly, Poole claims with 3G you have reached
the tipping point where you do not have to worry about
re-engineering applications just because they are mobile.

"Everyone who uses a mobile phone as part of their job is a
potential candidate for 3G data. Instead of using voice, with 3G
youre leveraging your data assets to provide information,"
says Poole."

The question remains though, if 3G is as good as its supporters
claim, why has it received such a bad press? "Its quite
popular to be negative about new technologies," says Poole.

"To date, the mobile phone industry has been technology-led and
has yet to learn the art of talking about business benefits. What
we need is for the suppliers to put mobile data into the language
of business. Yet, its amazing how quickly you become reliant
on 3G. Id predict that in a few years, 3G data is going to be
like mobile phones and email - youll wonder how you ever
survived without it."

As ITNs Nicholas Wheeler comments, 3G offers better
quality pictures, longer clips to view, faster downloads and better
sound. The trick lies in identifying the benefits for your
business. Learn: How the 3G market is evolving. Why New Zealand
organisations are taking a pragmatic view of the technology. What
are the prime factors affecting local uptake of 3G